McDonald's Case Study

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University of Jordan Faculty of Business Strategic Management “McDonald's” Case Study STRATEGIC MANAGEMENT

Prepared By Fathi Salem Mohammed Abdullah

2009

Table of Contents

Topics

Introduction History analysis Vision, Mission, Value The Five Forces Framework PESTEL Framework External Audit CPM-Competitive Profile Matrix External Factor Evaluation (EFE) Matrix Financial Ratio Analysis Internal Audit Internal Factor Evaluation (IFE) Matrix SWOT Matrix SPACE Matrix Grand Strategy Matrix The Boston Consulting Group (BCG) Matrix The Internal-External (IE) Matrix The Quantitative Strategic Planning Matrix (QSPM) Recommendations

Introduction: 2

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McDonald's Corporation is the world's largest chain of fast food restaurants, serving nearly 47 million customers daily through more than 31,000 restaurants in 119 countries worldwide. McDonald’s sells various fast food items and soft drinks including, burgers, chicken, salads, fries, and ice cream. Many McDonald's restaurants have included a playground for children and advertising geared toward children, and some have been redesigned in a more 'natural' style, with a particular emphasis on comfort: introducing lounge areas and fireplaces, and eliminating hard plastic chairs and tables. Each McDonald's restaurant is operated by a franchisee, an affiliate, or the corporation itself. The corporations' revenues come from the rent, royalties and fees paid by the franchisees, as well as sales in company-operated restaurants. McDonald's revenues grew 27% over the three years ending in 2007 to $22.8 billion, and 9% growth in operating income to $3.9 billion.1 History analysis:  The business began in 1940, with a restaurant opened by brothers Dick and Mac McDonald in San Bernardino, California.  Their introduction of the "Speedee Service System" in 1948 established the principles of the modern fast-food restaurant.

 The original mascot of McDonald's was a man with a chef's hat on top of a hamburger shaped head whose name was "Speedee." Speedee was eventually replaced with Ronald McDonald in 1963.  The present corporation dates its founding to the opening of a franchised restaurant by Ray Kroc, in Des Plaines, Illinois on April 15, 1955 , the ninth McDonald's restaurant overall. Kroc later purchased the McDonald brothers' equity in the company and led its worldwide expansion and the company became listed on the public stock markets in 1965.

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With the expansion of McDonald's into many international markets, the company has become a symbol of globalization and the spread of the American way of life. Its prominence has also made it a frequent topic of public debates about obesity, corporate ethics and consumer responsibility.2

Vision To be the best and leading fast food provider around the globe Mission McDonald's brand mission is to be our customers' favorite place and way to eat, and improve our operations to provide the most delicious fast food that meet our customers' expectations. Values Our values summarized in "Q.S.C. & V.". Provide good quality, services to customer. Have a cleanliness environment when customer enjoys their meal. The value of food product makes every customer is smiling.

Potential entrants

Suppliers

Competitive rivalry

The Five Forces Framework 2

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Buyers

The Threat of Entrants Large established companies with strong brand identities such as McDonald’s BKC, YUM, and WEN do make it more difficult to enter and succeed within the marketplace; new entrants find that they are faced with price competition from existing chain restaurants.

Bargaining Power of Buyers Low bargaining power of buyers.

Bargaining power of suppliers Bargaining power o